Hereford Road Project Spirals Out Of Control

[Hereford Voice]

Cabinet members in Herefordshire Council are facing a slew of questions after the city’s major road project careered out of control.

Furious residents want answers and have submitted numerous questions to the cabinet about the City Link Road which faces a £6 million overspend, jeopardising the Transport Hub and improvements the Commercial, Newmarket and Blue School Street elements, as well as flood mitigation measures in Hereford.

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The ruling Coalition leaders will meet on Thursday to discuss the matter and have expressed grave concerns about the ‘casual culture of overspend’ they say was the hallmark of the previous Conservative administration's approach to the delivery of major capital projects. Cabinet member for transport, John Harrington, said

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'the previous administration, which held power for 12 years before losing to the coalition of Herefordshire Independents, IOC and The Green Party in May 2019, seemed unaware, or unwilling, to get to grips with what was: ‘at best a lazy approach to procurement that simply sought to shift all projects out to Balfour Beatty to deliver, without anywhere near the tight internal project management and oversight we should have been exercising as a council’.

At a public Cabinet meeting this Thursday, 22nd July, members will debate a report which they say highlights a litany of errors and possible cover-ups which took place at the council under the Conservatives between 2015-2019. The current administration say previous cabinet members and officers played down the ballooning cost of the compulsory purchase orders needed to deliver the road element of the Hereford City Centre Transport Package. Coun Harrington claims the public and opposition councillors who challenged promises that ‘the most expensive piece of tarmac in England’ was delivered on time and to budget, were misled.

Coalition members committed themselves to unearthing the overspend on the city road scheme during a purge to improve project management and governance of major infrastructure projects in the council.

Cabinet Member for Finance, Liz Harvey said:

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‘At exactly the same time as past Chief Executive, Alistair Neal, was providing assurances to the Council’s Audit and Governance Committee that lessons would be learned and the council’s project management culture would be improved following the £1m overspend on refurbishing the council's Blueschool House, the City Link Road project was careering off the financial rails. This is another Blueschool House - with bells on, with an overspend of over £6 million.’

How Did Hereford’s City Link Road Spiral Out of Control?

Investigations commissioned by the current cabinet into value for money around council capital projects have concluded that land block purchases at the station end of the road created an early £3.8m overspend on the Link Road. The Coalition administration say this hole in the project’s finances was masked by combining the original stand-alone City Link Road project with an entirely separate Marches LEP funded project intended to deliver a transport hub at the station, public realm improvements on Commercial Road, Blueschool Street and Newmarket Street, providing much needed safe walking and cycling routes from the city to the railway station. The GP hub and new student accommodation along the Link Road were included and the combined project was rebranded as the Hereford City Centre Transport Package. Coun Harvey said she believed that combining of separate projects: ‘allowed Peter to rob Paul, and spiralling City Link Road costs were paid for with budgets originally set aside for the transport hub and other public realm improvements.’

Of particular concern to the current administration is the unusually high level, over 100, of 'compensation events', according to Coun Harrington, that saw contractors, Balfour Beatty Living Places, revise upwards their original bid to deliver the projects. Coun Harrington said: ‘I am not suggesting that BBLP deliberately underinflated their bid to secure the HCCTP contract, but so many compensation events during the delivery of a project raises questions about how the council managed this contract and how realistic BBLP's original bid was. We simply must not operate like this again in the future and, alongside senior officers, we have put in place procedures to ensure that all major capital projects are run by one corporate department from now on, with cross cutting responsibilities ensuring we do not ever again get the kind of silo working that I believe has led to some of the missteps that have dogged this project.’

Prior to Thursday’s cabinet meeting to discuss the matter Coun Harrington said that

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'the Coalition administration had been committed to improving project management in the council and that he was ‘extremely concerned’ when in early January 2021 officers told him that a compulsory purchase mechanism used to buy properties along the Link Road, a route of less than one mile, meant that the council had not yet finished paying for land acquired to build the road, despite the road being opened and the former administration claiming it had been delivered 'on time and in budget'.

Coun Harrington said:

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‘I had to take a decision to allow already severely depleted existing capital left in the scheme’s budget to be used to pay landowner's final settlements or the council would have faced certain legal action. I made this decision understanding that another decision would have to be taken to add capital to the programme in order to deliver the remaining elements of the package, once we had worked out what we eventually had left in the pot. I was dumbfounded by the approach taken by the previous administration, which was to keep reducing the budget for the non-road elements of the Hereford City Centre Transport Package in order to pay for the burgeoning costs of a road that is less than one mile and will end up costing us in excess of £30 million. At what point did they realise that this was not sustainable and they would have to add more capital to the project? Why didn't they bring this out into the public domain before we came in as administration and began a thorough review? Was it because they were unaware of the major problems around the finances of this project or because they chose to bury the bad news until after the May 2019 local elections?’

Coun Harrington added:

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‘In our first two years of administration, not only have we had to deal with the continued and severe effects of the national Conservative government's devastating austerity policy on rural authorities like Herefordshire, the worst floods in recorded history and an unprecedented global pandemic, but we have had to grasp and deal with structural issues, casual overspends and working practices within the council that the previous Conservative administration seem simply to have chosen to ignore for 12 years. To hear them now in opposition, pandering to the crowd and reinforcing the claptrap in some media outlets about the panacea of a western bypass, a road of several miles with an estimated cost of a quarter of a billion pounds, when they couldn't even deliver a road of less than one mile on time and on budget, just makes my brain hurt.’

Finance member, Coun Liz Harvey, commented:

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‘It’s reassuring to see that the measures we have put in place to tackle project management and governance failures are flushing out these sorts of issues. What’s concerning is the plundering of other project budgets to hide overspends on land acquisitions via the back door, and that a worrying number of unscheduled changes to the road construction contract itself have been kept under wraps for so long. The most charitable view one can take is that the previous Conservative cabinet were just asleep at the wheel. If that’s not the case, then serious questions need to be asked of those in charge at the time over the misleading statements they made to the public, to council and to the LEP in hiding this mess.’